Q3 Preview: Qualcomm (QCOM) Investors Expected to Embrace the 'New Normal' in Mobile


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Shares of Qualcomm, Inc. (Nasdaq: QCOM) are higher Wednesday afternoon heading into the tech giant's third-quarter 2012 report. To listen in on the conference call, which is scheduled to begin at 1:45pm PDT (4:45pm EDT), click here .

The Street is currently looking for Qualcomm to produce 18 percent of EPS growth to 86 cents on revenue of $4.68 billion. Estimize consensus views are looking for more robust EPS to 88 cents and revs of $4.75 billion.

Investors might take a couple of cues from Intel (Nasdaq: INTC), which has been trying to be a better presence in the mobile device market over the last couple of years. On Tuesday, Intel beat EPS views and missed on the top-line, with sales guidance being slightly lower than expectations moving into the third quarter. For more on Intel's numbers, click here .

Analyst Roundup
Data from Bloomberg has 40 analysts at Buy on Qualcomm, four at Neutral, and two with a Sell.

The Street's price target average is $70, which ranges from $57 to $85. Over the last year, Qualcomm has traded within the range of $45.98 to $68.87.

Volatility on Qualcomm shares is down about 3 percent from Tuesday's close, though overall implied volatility is up 125 percent from its trailing average.

Analyst Comments
NOTE: Last quarter, Qualcomm guided for third-quarter GAAP EPS of 67 cents to 73 cents and 23 percent to 24 percent revenue growth.

  • JPMorgan sees sales of $4.7 billion, total EBT margins at 39.7 percent, and EPS of 86 cents. Largely, the firm expects Qualcomm to report in-line with views, though their might be some downside in MSM chipset guidance.

    JPMorgan noted that 28-nm supply shortages will be material for Qualcomm in the third and fourth quarters.

    Though 3G subs in China rose from 7.2 million in April to 7.7 million in May, overall macro weakness and supply chain data show it might still be a tough go for Qualcomm.

  • D.A. Davidson (DAD) sees Qualcomm reporting revs of $4.64 billion and EPS of 0.83. DAD notes how Qualcomm guided for lower MSM shipments to 144 million to 152 million, which is flat to down 5 percent from the second quarter. The firm commented "Historically, the June quarter has been strong for MSM units, up mid to high single digits sequentially on average. We don't believe a capacity issue is the main cause for the pause in June. We believe it's possible that a new normal is developing around Samsung and Apple, where new launches are driving sequential growth in individual quarters."

    Issues affecting Qualcomm into its third quarter include macro developments as well as the impending Apple (Nasdaq: AAPL) refresh.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Qualcomm's past performance at Streetinsider's Qualcomm's Income Statement .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Earnings , Stocks
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